Antwoorden Strategic control H23
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CHAPTER 23
PERFORMANCE MEASUREMENT, COMPENSATION, AND
MULTINATIONAL CONSIDERATIONS
23-1 Examples of financial and nonfinancial measures of performance are:
Financial: ROI, residual income, economic value added, and return on sales.
Nonfinancial: Customer perspective: Market share, customer satisfaction.
Internal-business-processes perspective: Manufacturing lead time, yield,
on-time performance, number of new product launches, and number of
new patents filed.
Learning-and-growth perspective: employee satisfaction, information-
system availability.
23-2 The three steps in designing an accounting-based performance measure are:
1. Choose performance measures that align with top management’s financial goals
2. Choose the details of each performance measure in Step 1, including the time horizon and
measurement of various aspects of the measure
3. Choose a target level of performance and feedback mechanism for each performance
measure in Step 1
23-3 The DuPont method highlights that ROI is increased by any action that increases return
on sales or investment turnover. ROI increases with:
1. increases in revenues,
2. decreases in costs, or
3. decreases in investments,
while holding the other two factors constant.
23-4 Yes. Residual income (RI) is not identical to return on investment (ROI). ROI is a
percentage with investment as the denominator of the computation. RI is an absolute monetary
amount which includes an imputed interest charge based on investment.
23-5 Economic value added (EVA) is a specific type of residual income measure that is
calculated as follows:
Economic value After-tax
added (EVA) = operating income – (
Weighted-average × Total assets minus
cost of capital current liabilities )
23-6 Definitions of investment used in practice when computing ROI are:
1. Total assets available
2. Total assets employed
3. Total assets employed minus current liabilities
4. Stockholders’ equity
23-1
Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar.
geschreven door:
ingevanbeek93
De Marktplaats voor het Kopen en Verkopen van je Samenvattingen
Op Stuvia vind je het grootste aanbod aan samenvattingen en collegeaantekeningen. De
documenten zijn geschreven door jouw medestudenten, specifiek voor jouw opleiding!
www.stuvia.com
Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar.
, Stuvia.com - De Marktplaats voor het Kopen en Verkopen van je Samenvattingen
CHAPTER 23
PERFORMANCE MEASUREMENT, COMPENSATION, AND
MULTINATIONAL CONSIDERATIONS
23-1 Examples of financial and nonfinancial measures of performance are:
Financial: ROI, residual income, economic value added, and return on sales.
Nonfinancial: Customer perspective: Market share, customer satisfaction.
Internal-business-processes perspective: Manufacturing lead time, yield,
on-time performance, number of new product launches, and number of
new patents filed.
Learning-and-growth perspective: employee satisfaction, information-
system availability.
23-2 The three steps in designing an accounting-based performance measure are:
1. Choose performance measures that align with top management’s financial goals
2. Choose the details of each performance measure in Step 1, including the time horizon and
measurement of various aspects of the measure
3. Choose a target level of performance and feedback mechanism for each performance
measure in Step 1
23-3 The DuPont method highlights that ROI is increased by any action that increases return
on sales or investment turnover. ROI increases with:
1. increases in revenues,
2. decreases in costs, or
3. decreases in investments,
while holding the other two factors constant.
23-4 Yes. Residual income (RI) is not identical to return on investment (ROI). ROI is a
percentage with investment as the denominator of the computation. RI is an absolute monetary
amount which includes an imputed interest charge based on investment.
23-5 Economic value added (EVA) is a specific type of residual income measure that is
calculated as follows:
Economic value After-tax
added (EVA) = operating income – (
Weighted-average × Total assets minus
cost of capital current liabilities )
23-6 Definitions of investment used in practice when computing ROI are:
1. Total assets available
2. Total assets employed
3. Total assets employed minus current liabilities
4. Stockholders’ equity
23-1
Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar.
